Retailers Shift Holiday Hiring Mix

Less Temporary Hiring and Greater Focus on Employees Who Best Understand Their Brand, According to Korn Ferry Survey

-- Retailers Put Increasing Emphasis on In-Store Customer Experiences --

-- Majority Say Increases in Minimum Wage Have Hampered Hiring Efforts –

-- Retailers Cautiously Optimistic About Holiday Sales Prospects --

Los Angeles, Oct. 1, 2018 – As retailers prepare for the competitive holiday shopping season, they are putting more emphasis on their customers’ in-store experiences and are making hiring decisions that reflect that trend. That according to a new Korn Ferry (NYSE:KFY) retailer survey.

The survey of nearly 20 major U.S. retailers representing nearly 1 million employees and $1.2 billion in sales took place in September 2018.

It found that nearly 15 percent of retailers are looking for employees who better align with brand culture, and 21 percent say they are putting a greater emphasis on employees who can help create strong in-store experiences for customers.

The trend of creating a strong in-store experience that reflects a retailer’s brand is boding well for those workers seeking permanent employment. Nearly two-thirds (64 percent) of retailers say that compared to last year, they expect a higher ratio of permanent to seasonal employees. The top reason cited (25 percent) is that retailers are giving their permanent employees more hours.

“Retailers are increasingly focusing on creating a unique in-store environment, where customers can see and feel the merchandise, which helps them relate more to the company’s culture and ethos,” said Korn Ferry Senior Partner Craig Rowley. “Customers may decide to go home and make their purchases online, but that in-store experience will create greater brand affinity.”

The survey shows that while in-store experiences may be more of a focus this year than in recent years, retailers are still staffing up to respond to e-commerce orders, with 55 percent saying they are hiring more seasonal staff in distribution centers due to .com sales.

“Clearly, this year’s holiday retail season will have an omni-channel focus, where both in-store and online buyers will be critical to sales success,” said Rowley.

Unfortunately, filling retail roles may be a challenge. Sixty-seven percent say recent hikes in minimum wages and market increases in the retail industry have made hiring seasonal staff more difficult, and nearly a fifth (17 percent) say they will see 5 percent to 10 percent fewer applicants this year. One reason that there are fewer seasonal applicants may be that nearly a fifth of respondents say they pay seasonal employees on average 5 percent to 10 percent less than permanent employees.

“In this competitive market for qualified candidates, it’s important that retailers convey to prospective and current employees how their organization provides a better culture and work environment than other retailers,” said Rowley.

Despite potential hiring challenges, retailers are expecting solid sales, with a third expecting a 5 percent to 10 percent increase in sales in 2018. None believe they will see a decrease in sales this year. The survey found that retailers are also shifting their discounting strategy, with 36 percent saying they plan on cutting discounts this year.

“Retailers are cautiously optimistic that the economy will stay strong into the holiday season, which will help create solid sales figures,” said Rowley.

Survey Results

How much of an increase/decrease in total sales do you predict this holiday season over last year?

Over 20% increase in sales 0.00%
11 - 20% increase in sales 0.00%
5 - 10% increase in sales 33.33%
About the same 66.67%
10% decrease in sales 0.00%
20% decrease in sales 0.00%
Over 20% decrease in sales 0.00%

Compared to last year, have the qualifications you're looking for in candidates changed?

Yes, I'm placing a greater emphasis on in-store retail experience 21.43%
Yes, I'm placing a greater emphasis on online retail experience 0.00%
Yes, I'm placing a greater emphasis on fulfillment experience 7.14%
Yes, I'm placing a greater emphasis on merchandise handling experience 0.00%
Yes, I'm placing a greater emphasis on employees who align with brand culture 14.29%
Yes, I'm placing a greater emphasis on employees with lower salary expectations 0.00%
Yes, I'm placing a greater emphasis on employees who have more scheduling availability 7.14%
No, my hiring preferences have not changed since last year 50.00%

If you plan to hire fewer seasonal workers this year, what is the primary reason?

Minimum wage and or market increases 0.00%
Reduced store sales plan requiring fewer people 8.33%
Reduced hours/staffing levels compared to last year 0.00%
Giving permanent employees more hours 25.00%
N/A – I plan to hire the same or more seasonal staff this year 66.67%

Compared to last year, what is your ratio of permanent to seasonal store employees?

Fewer permanent workers, more seasonal workers 9.09%
About the same 27.27%
Fewer seasonal workers, more permanent workers 63.64%

Compared to last year what is your permanent/normal store employee staffing level?

Lower than usual 0.00%
At the normal level for our stores 81.82%
Higher than usual 18.18%

How have minimum wage increases and or market increases in the retail industry impacted your seasonal hiring?

Hiring seasonal staff is now easier 8.33%
Hiring seasonal staff is now more difficult 66.67%
The trend has not significantly impacted our ability to hire seasonal workers 25.00%

Do you currently have an omnichannel strategy that has been communicated to the organization?

Yes 42.86%
No 28.57%
Omnichannel strategy is still in progress 28.57%

How many seasonal workers did you hire last year?

< 1,000 15.38%
1,001 - 5,000 38.46%
5,001 - 10,000 7.69%
10,001 - 30,000 23.08%
30,001 - 60,000 0.00%
> 60,001 15.38%

How many seasonal workers do you plan to hire this year?

< 1,000 15.38%
1,001 - 5,000 38.46%
5,001 - 10,000 7.69%
10,001 - 30,000 23.08%
30,001 - 60,000 15.38%
> 60,001 0.00%

Were you able to hire all the seasonal employees in your plan last Holiday Season?

Yes 76.92%
No 23.08%

On average, compared to permanent workers in the same position, how do you pay seasonal workers?

Over 20% more 0.00%
11 - 20% more 0.00%
5-10% more 9.09%
About the same 72.73%
5-10% less 18.18%
11 - 20% less 0.00%
Over 20% less 0.00%

What percentage of seasonal workers do you expect to hire on a permanent basis after the holidays?

0% 0.00%
1-5% 9.09%
6-10% 45.45%
11-15% 0.00%
6-20% 18.18%
21-25% 27.27%
26-30% 0.00%
31-35% 0.00%
36-40% 0.00%
41-45% 0.00%
46-50% 0.00%
50% 0.00%

What are you MOST concerned about negatively impacting sales this holiday season?

General economic conditions 50.00%
Unemployment rates 16.67%
Federal, State and/or Local Regulations 0.00%
Rising interest rates 0.00%
Supply chain disruptions 0.00%
IT systems capability to handle orders, etc. 0.00%
Competition from e-commerce 25.00%
Other, please explain 8.33%

How does the quantity of seasonal applicants compare to that of last year?

Over 20% more applicants 0.00%
20% more applicants 0.00%
10% more applicants 8.33%
About the same 75.00%
5-10% fewer applicants 16.67%
11 - 20% fewer applicants 0.00%
Over 20% fewer applicants 0.00%

Compared to last year, how is the quality of seasonal associate applicants?

Significantly better 0.00%
Better 9.09%
About the same 81.82%
Worse 9.09%
Significantly worse 0.00%

Has the growth in e-commerce sales impacted your seasonal staff hiring?

Yes, we are hiring more seasonal staff in distribution centers due to .com sales 54.55%
Yes, we are hiring less seasonal staff in stores due to .com sales 0.00% 0
No, .com sales have no impact on seasonal staffing (in the DCs or stores) 27.27%
Not applicable - we have not seen growth in e-commerce sales 0.00% 0
Other, please explain 18.18%

Will you be utilizing your mobile shopping platform to help drive sales during the holiday season?

Yes 81.82%
No 9.09%
N/A, we do not have a mobile platform 9.09%

Do you count e-commerce sales in store revenues?

No, e-commerce is counted separately 18.18%
Yes, e-commerce sales fulfilled in a store are counted as revenue 45.45%
Yes, e-commerce sales made in a stores trade area are counted as revenue 27.27%
N/A 9.09%

Do you have formal training programs in place for seasonal staff?

Yes 81.82%
No 18.18%

Has your omnichannel strategy impacted the training you provide to your seasonal sales staff?

Yes 66%
No 35%

On average, what are this year's anticipated hire rates for seasonal employees compared to last year?

$.05-$.15 less 0.00%
About the same 27.27%
$.05-$.15 more 9.09%
$.16-$.30 more 27.27%
$.31-$.60 more 27.27%
$.61-$.90 more 0.00%
$.91-$1.10 more 0.00%
>$1.10 more 9.09%

Are you trying to cut back on discounting overall this year?

36 % yes
64 % no

About Korn Ferry

Korn Ferry is a global organizational consulting firm. We help clients synchronize strategy and talent to drive superior performance. We work with organizations to design their structures, roles, and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop, and motivate their people.